Some fundraisers pay >90% of the funds to themselves

https://www.propublica.org/article/political-nonprofits-fundraising-ftc-irs-527s-pacs

by hilux • 2 years ago

134 53 2 years ago

Wait till they find out about the Human Fund

owgevub• 2 years ago

I was skeptical of the Human Fund until I learned Vandelay Industries exclusively uses them for its charitable outreach.

nytesky• 2 years ago

yeah, this is been one of the most difficult parts about becoming an adult was realizing that so many nonprofits are basically just self-serving jobs programs.

especially when the CEO can be paid "market rate."

Loughla3• 2 years ago

I stopped donating to a very well known charity organization when I found that 85% of the annual costs were administrative, 10% we're property costs, and only 5% went to actual programs. This may be just the way the local chapter is set up, but it's fucking greasy.

booleandilemma• 2 years ago

Why do people post comments like this and not name the offenders?

newshackr• 2 years ago

There are also those nonprofits that are run by rich people that are basically a mechanism to reduce taxes on activities they would already do

yieldcrv2• 2 years ago

The tax code is a reading comprehension game.

The 400 section specifies tax deferral programs (ie. 401(k), there are other subsections)

The 500 section specifies tax exempt programs (ie. 501(c)(3), there are other subsections)

The offices within the IRS dedicated to those sections help you. As opposed to the adversarial relationship that low income tax credit people have. My point is that its not an accident or attempt to pull a fast one on the tax authority. The government is telling you what to do.

rqtwteye2• 2 years ago

And to give prestigious jobs to family members.

throw__away73912• 2 years ago

I worked in the space for a couple of years and I will never give a penny to any of them after what I saw. The organizations are a mess of petty squabbling between people who could never get real jobs, there's a complete misalignment of incentives between the people giving, vs the people doing, vs the recipients that leads to all sorts of absurd inefficiencies with zero pressure to fix them. Fundraising ("development") is where the real horrors are. If a charity can raise $1000 at a cost of $990 that's a free $10 for them, so most do not care at all except to the extent that it hypothetically exhausts the potential pool of donor dollars.

apantel• 2 years ago

Yes, it’s called running a “charity”.

Waterluvian• 2 years ago

One of the many satisfying things about local volunteering is that 100% of your investment goes to the cause, and you get a first person view on what tools or materials the team/club/class could use if you're thinking of donating more than just your time.

pavlov• 2 years ago

There are lots of apps to plan and track one's investments. Maybe there should be an app to track one's donations too.

If I could see a history of what was the ROI (in terms of money spent on actual programs) of my monthly donations, and also easily reallocate those donations to other charities, I'd certainly check up on that app every once in a while.

silverquiet• 2 years ago

I believe this is the idea of effective altruism.

alwa• 2 years ago

I believe part of it is about measuring quantitative indicators of program quality, but they also seem to go for the more fraught project of trying to put a dollar figure on the value of the outcomes. Or a “quality-adjusted life years” figure, or whatever have you.

It feels like that frame of mind selects for a very specific sense of success.

sharemywin• 2 years ago

I don't know if this is any help but it looked interesting:

https://www.charitywatch.org/top-rated-charities

vunderba• 2 years ago

I've used Charity navigator for years. They have alway been a very good source of high-quality charities to ensure the bulk of the donation goes to the actual cause. It even has audit information breaking down the distribution of funds. Givewell is another recommendation.

https://www.charitynavigator.org

https://www.givewell.org/

ethbr1• 2 years ago

+1 Management vs advertising vs program spending can drastically vary from charity to charity. And there are some bad practices even by very well-known names (see: ad spend).

rebello95• 2 years ago

Another resource I’ve found super helpful is The Life You Can Save by Peter Singer. Very interesting read/listen and gets you thinking about the most impactful ways to give. Free to download or listen as well: https://www.thelifeyoucansave.org/the-book

rqtwteye2• 2 years ago

Go to Northern VA. There are a lot of mansions owned by non profit higher ups.

dagw• 2 years ago

I work at a non-profit (although not one that fundraises and solicits donations), and while I do earn less than could make in the private sector, I still fully expect to be paid at a level commensurate with my skill and experience. If you want to attract good people you have to pay at least close to what they could make working somewhere else.

cljacoby• 2 years ago

Yup. There's definitely some neighborhoods like Great Falls where it seems like everyone is either a corporate exec, a federal politician, or a pro athlete.

lettergram• 2 years ago

Yeah, pretty much better off for society offering low-interest loans to people trying to start businesses. That can produce value and jobs in products that other people value. A rising tides raise all boats, so to speak.

Frieren• 2 years ago

"charity spent millions to raise thousands" is a very usual way of tax evasion. The charity owner has parties with friends and family as guests. This is taxes as "charitable work".

Can this be improved? Yes, this was going to be improved but the politicians were invited to a fundraiser where they got good food and some freebies. And then it stopped. Or something like that...

ben_w2• 2 years ago

It doesn't even need malice or selfishness, this kind of thing can also be lack of skill.

A lot of for-profit businesses also take a lot of investments and fail to make much money.

I did a sponsored walk as a kid, I don't think I even raised enough to cover the cost of the petrol to get to the place it was at.

And I hear hospitals have to ask people to not do sponsored skydives to raise money for them, owing to the mean amount raised being lower than the mean cost of the healthcare they need to provide due to skydiving accidents.

elaus2• 2 years ago

But why would hospitals have to cover the cost of skydiving accidents if they didn't even organize the fundraiser?

(side note: Living in Europe, I never heard of skydiving as a popular way to do fundraisers – interesting!)

jzebedee• 2 years ago

At these scales, the difference between intentional fraud vs. incompetence or negligence is meaningless. Millions of dollars purportedly for charity are being laundered tax-free and enriching someone else.

dylan604• 2 years ago

Susan G Koman is infamous for this. So many people assume money raised is for cancer research, when it's actually meant for awareness. Yes yes, we're well aware that breast cancer exists. Let's cure it with the money instead.

hilux3• 2 years ago

That is infuriating!

It also seems to not be true: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1508105/

mNovak• 2 years ago

While this is also true, the article is more about the direct scam that is fundraising companies. These are in principle separate of the charity, basically running a call center and collecting the funds, and that company pockets 90% of the funds people think they're donating to the charity. Of course the 'charity' is aware of this and is complicit, either because they have no other means of fundraising, or (as seems to be the case in this article) the charity is also a scam, basically just having a good name to plug into the script.

Point is, it's more than just writing off parties and entertainment or high salaries, it's directly taking cash in pocket.

throw__away73912• 2 years ago

I worked with about a dozen or so for a few years and from what I saw they are nothing but one layer of horror built upon another. The incentives are so misaligned that the distinction between "scam" and "incompetence" is virtually meaningless. There is absolutely zero sense of financial reality or proportion present anywhere. If your organization spends $500,000 to rescue one dog but gets a lot of media coverage and banks a ton of photos and video to use in future fundraising efforts, this is a win. If next year you spend $10 million on marketing and development events and are able to raise $10,600,0000 for your efforts, that's also a win.

One especially crazy example of this thinking is the constant internal fundraising efforts. Most of the organizations I worked with were constantly doing internal fundraising, e.g. collecting donation from the same employees they were paying. These efforts would consume absolutely enormous amounts of on the clock employee time on frankly quite childish activities (think accountants doing arts and crafts with markers and construction paper) to raise a pittance in donations from their own employees. Most of the organizations did this once per month. In some cases this consumed an entire workday for a large proportion of employees for an average donation of $5-$15 dollars.

LargoLasskhyfv• 2 years ago

That's the plot of some recent, just 'so-so' action movie.

https://en.wikipedia.org/wiki/The_Beekeeper_(2024_film)

You'll get to see these call centers being blown up, and some scammers beaten or killed by the main protagonist. Also government/political conspiracy, because the main villain is the son of Mrs. President. And of course the secret service protecting her and family at all costs against revenge.

Maybe also elements of persiflage of current tech-guruism.

yieldcrv2• 2 years ago

Many wealthy people that I know in the non-profit space vote for gridlock in Congress.

I’m talking otherwise Democrat northeasterners aiming to send a Republican to the Senate or vice versa. Nothing gets passed on this topic as long as the filibuster cannot be met.

It’s interesting to me. I can see benefitting from the status quo as well compared to some bills I’ve seen.

jcdavis• 2 years ago

For an absolute wild docuseries about one of these related scams, check out Telemarketers on HBO.

welder• 2 years ago

Only donate to smaller non-profits, get to know them first, find out if the administrators take any income from the non-profit, then make up your mind to donate or not.

For example, one charity I like [0] runs a school and the administrators don't take any income from it.

[0] https://www.dominino.de/spenden-helfen

ryan_lane• 2 years ago

Smaller non-profits are _way_ more likely to poorly use your funds, especially if they fundraise. Use charity navigator or other reputable organizations to see if a charity you want to support uses your funds well or not.

Some non-profits only pay salaries of employees, but spend the vast majority of their time and money on their fundraising events, which are just ways for rich people to throw parties for free. In that case, they'd still pass your test.

People who work at non-profits deserve to be paid a similar salary to what they'd be paid in the private sector. The important part is that a non-profit should be using the majority of their funds on their mission (and that may require the majority of the funds going to the workers, depending on the mission).

foreigner• 2 years ago

Many years ago my sister had a job going door to door asking for donations for environmental causes. I was shocked to discover that the people doing the canvassing immediately pocketed half of the donations as they walked away from the door. And that was only the percentage taken by the people on the front line!

sfn42• 2 years ago

I met a girl who was selling subscriptions for save the children once. Ended up meeting up with her later and asked her about the job. If I had signed up for the thing, paying about $20 a month, she would pocket the first three months. Not sure what her employer would take after that, but knowing they were flying these people around, paying for hotels year round, and probably taking a decent profit on top, I'm guessing I'd be paying for close to a year before any hungry African children would see any money.

They also frame it like you're paying for a specific kid, telling you their story and showing pictures etc, but it's the same picture and story they show everyone. Total scam.

SloopJon• 2 years ago

Although a lot of the comments so far refer to charitable fundraising, this story is about political fundraising, often confusingly similar to charities; e.g., the American Breast Cancer Coalition. The kicker is that some of the parties involved have previously been "banned from all charitable fundraising for life."

sparcpile• 2 years ago

Charities can hide their percentages when they self-deal with people on their board. It's highly unethical.

Wreaths Across America is notorious for this. All the money they raise goes to the wreath making company that the board members own. When they put out RFPs, as per legal requirements, Worcester Wreath Company is always sole-source provider. https://popular.info/p/the-truth-about-wreaths-across-americ...

Worcester Wreath Company lost its contract with LL Bean due to their bad busines practices. Wreaths Across America was created by Morril Worcester as a way to sell more wreaths. It's a grift all the way down.

https://files.mainelaw.maine.edu/library/SuperiorCourt/decis...

toomuchtodo• 2 years ago

ProPublica 527 Explorer Database: https://projects.propublica.org/527-explorer/

wdh505• 2 years ago

I have prepped some tax returns for non profits (990) in the usa, and all are publicly available on guidestar.org and you can see the amount paid to the board and key employees like ceo. It would be cool if the information was easier to compare.

daft_pink• 2 years ago

If you want to see a whole documentary that really outlines and emphasizes this point, the ‘Telemarketers’ documentary follows a few workers for a police lodge hotline that also keeps 90% of the revenue for themselves.

RecycledEle• 2 years ago

Unfortunately, prosecutors rarely go after nonprofits for fraud. This has led most grifters into the nonprofit sector.

Some fundraisers pay >90% of the funds to themselves

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